THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: Happening right now, a big state paying a heavy price for moving up its presidential primary. Four Democratic presidential candidates are pulling out of Michigan's January 15th contest. We're going to tell you what happens now and whether Michigan will matter. Also this hour, Democrats pick a new fight over domestic spying. It's part of an election season war between Republicans and Democrats over who is tougher on terrorists.

And Republicans are forced to choose between a president and children's health care. It's not as easy a decision as some might think. We'll speak about it with the number two House Republican, Roy Blunt -- he is here live in THE SITUATION ROOM -- and ask him if there's any way his party can win on this issue.

I'm Wolf Blitzer. And you're in THE SITUATION ROOM.

Up first this hour, what if they threw a presidential primary and half the candidates decided to skip it? That's the situation right now in Michigan, where four Democrats today pulled their names off the January 15th ballot.

Barack Obama, John Edwards, Joe Biden and Bill Richardson are siding with the Democratic National Committee against Michigan, which broke party rules by moving up its presidential contest.

Our senior political analyst, Bill Schneider, is standing by.

Bill, what about the Democratic frontrunner, Hillary Clinton? I didn't see her name on that list.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, the Clinton campaign tells CNN that Senator Clinton will not campaign in Michigan or spend money there. But she does not think it's necessary to remove her name from the ballot. Her strategic calculation may be different from her competitors.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice over): At the very moment when nine Republican candidates are holding a debate in Michigan, four Democratic candidates, Joe Biden, John Edwards, Barack Obama, and Bill Richardson, are filing painers (ph) to have their names taken off of Michigan's primary ballot. Why are they dissing a large crucial state with a big labor vote? Michigan is defying national Democratic Party rules. It has scheduled its primary on January 15th, three weeks before states are allowed to start choosing delegates. The national party is allowing four states to jump the starting gun -- Iowa, New Hampshire, Nevada, and South Carolina.

GOV. BILL RICHARDSON (D-NM), PRESIDENTIAL CANDIDATE: We have all signed a pledge saying that we will campaign in the first four states as prescribed by the rules.

SCHNEIDER: The leading Democratic candidates had already agreed not to campaign in Michigan or any other state whose primary violates party rules. So why are they taking the additional step of removing their names from the ballot? Could they be making a strategic calculation?

Here is one. Biden, Edwards, Obama and Richardson have to stop the Democratic frontrunner, Hillary Clinton. If there is no campaign, the candidate most likely to win Michigan is Hillary Clinton.

Her Democratic rivals don't want a Clinton victory in Michigan to count. They want Iowa and New Hampshire, where they have a better chance of stopping Clinton, to count more.

(END VIDEOTAPE)

SCHNEIDER: Edwards said in a statement, "In these early states, issues matter more than money, celebrity and advertisements. Voters want and deserve a candidate who represents real people, not corporate special interests."

For Senator Clinton, winning even the non-competitive primary in Michigan would actually be useful. It could earn her a lot of goodwill in Michigan if the state schedules a later caucus to pick its convention delegates. And, of course, Michigan will be very important for Democrats in the general election -- Wolf.

BLITZER: What about Florida? That's the other big state, Bill, that's moved up its primary in violation of the Democratic Party rules. What's happening on that front?

SCHNEIDER: Well, the same thing applies to Florida. The Democrats have already agreed not to campaign in Florida.

Florida law says the parties have to submit a list of candidates whose names will be on the primary ballot by October 31st. So the candidates have until the end of the month to pull their names off the Florida ballot -- Wolf.

BLITZER: All right, Bill. Thank you very much.

So, with Democrats dropping out in Michigan and the primary calendar still in chaos, what does it all mean for the presidential race?

Let's bring in our senior political analyst, Gloria Borger. What happened here precisely? Bill did an excellent report on that, but there's -- I guess you risk alienating a lot of people in the state of Michigan and the state of Florida. These are two critically important states in any contest. And the Democratic Party is saying, you know what? You guys don't matter.

GLORIA BORGER, CNN SR. POLITICAL ANALYST: Right. I think it will be surprised to learn that this was raw politics.

Obviously, Hillary Clinton is doing what's best for her. You're right, she doesn't want to alienate people in that state. And I guarantee you that she's going to get some great endorsements coming out of this, because people in the state of Michigan will say, you know, we are happy you didn't withdraw from the ballot.

But look at it from her point of view. She's ahead in the latest polls in the state. She is ahead of Barack Obama by 20 points. So she doesn't need to do anything.

As for the other candidates, they want to make this irrelevant. How do you make it irrelevant? You say, well, we're not participating. So they take a victory away from her.

But should she need extra delegates, if this is a really contested race, Wolf, she could always go to the convention and say, I won there, I won in that important state, give me those delegates. So she is leaving her options open, although she is saying, I'm not going to spend money and I'm not going to campaign, just like the other folks.

BLITZER: Michigan is clearly a critical state for the Democrats.

BORGER: Yes.

BLITZER: Doesn't the Democratic Party realize that they are risking alienating a lot of people in Michigan, let alone Florida, which we all know is critical as well?

BORGER: You might ask that question as you just have, and I think that's the question a lot of Democrats are asking. You know, there was this fight, Wolf, for who could be relevant, which state could be important. Why should it be Iowa? Why should it be New Hampshire?

Everybody wanted to go first. And the Democratic National Committee had a real problem because there was a race not to the finish line, but to the front of the line. And they've had that problem and it's caused tremendous strife inside the Democratic Party.

And as Bill just pointed out, they are going to have to go through this again in the state of Florida, which is also an important state in the general election. Michigan, for example, tends to go Democratic. But it's a battleground state. And it's always close, it could go either way. In a general, maybe Democrats in the state of Michigan will remember Hillary Clinton. BLITZER: The Democratic National Committee takes a chance, takes a chance, a serious chance of shooting themselves in the foot here with two critical states, Michigan and Florida. But we'll watch all of this unfold. The political dust has not settled yet.

For the most up-to-the minute political news anywhere available, go to CNNPolitics.com. Get behind-the-scenes details from CNN's Emmy Award-winning best political team on television -- CNNPolitics.com.

Let's go to Jack Cafferty. He is part of that excellent team as well. He's got "The Cafferty File" in New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: So kind of an incredible story here, Wolf.

In the war on terror, Washington has managed to shoot itself in the head. A small private intelligence company says the Bush administration's mishandling of a recent Osama bin Laden video has ruined its spy efforts. "The Washington Post" reports the SITE Intelligence Group, name of the company, says it gave two senior officials in the administration access to this video days before September 11th on condition that they not make it public until al Qaeda released the tape.

Within 20 minutes, various intelligence agencies started downloading the video and by later that day, both the video and the transcript of it were leaked on to cable television news and various Web sites and broadcast around the world. The results were devastating, as you might expect.

The company's founder, Ritz Katz, says once al Qaeda realized that it was an intrusion into their secret network, they simply shut it down. Katz says techniques that took years to develop are now infective and worthless.

The White House, of course, says they didn't do it. They said, "Any time a citizen comes forward to provide information, we want to encourage it and we want them to know their sources will be protected."

Some protection, huh?

Here's the question. How can the U.S. win the war on terror if the Bush administration is ruining efforts to spy on al Qaeda?

E-mail us at caffertyfile@CNN.com or go to CNN.com/caffertyfile.

Apparently, the intelligence community had a keyhole into this Internet/Intranet network that al Qaeda has set up around the world. They could monitor all kinds of stuff -- personnel, payments for various things. All kinds of mundane day-to-day stuff. But they also picked up some very key information along the way, and now apparently that network no longer exists.

BLITZER: You know, I've been spending a lot of the day trying to figure out what happened here, Jack. It's really an amazing story. And we're going to have a lot more on this coming up in THE SITUATION ROOM.

But do you understand why this small, little, private group, they can get this kind of information and the U.S. intelligence community, which has tens of billions of dollars at its disposal, can't get this kind of information and relies on some private group, a small, tiny, little group to get access to this intelligence? Help me understand that.

CAFFERTY: Are you suggesting that the private sector might be more efficient than the federal government? I never heard that concept before.

BLITZER: I'm just wondering -- I'm just wondering what happened here.

CAFFERTY: The other part of it is, Wolf -- yes, the other part of it is I'm sure we don't know that -- the degree to which the federal government is involved in this kind of activity and whether or not, you know, this small company that provided this information, maybe it was redundant, maybe it wasn't.

I mean, there's a lot of stuff we're not told. But if this story is true -- and "The Washington Post" is generally a pretty good source on this kind of thing -- that's a disaster. I mean, it's a huge mistake.

BLITZER: Stand by, Jack. Thanks very much.

I'm anxious to hear what our viewers think as well.

Right now both parties are grappling with issues that have been political losers for them. Will Republicans break with the president and override his veto of the children's health insurance bill? I'll ask the number two Republican in the House of Representatives, Roy Blunt, if members of his caucus are ready to cave.

Democrats are picking a new fight over warrantless wiretaps as a tool in the war on terror. But are they destined for defeat?

And Mothers Against Drunk Driving getting mad. Their target, new efforts to lower the legal drinking age in the U.S. to 18.

Lots more coming up. Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: House Republicans are bracing for a critical vote on children's health care next week and the possible backlash. Democrats are hoping -- hoping to override President Bush's veto of a bill to expand a popular health insurance program for kids known as SCHIP. Republicans have a tough choice: back the president or risk being accused of turning a blind eye to kids 'health.

Joining us now, the number two Republican in the House of Representatives, the minority whip, Roy Blunt.

Congressman, thanks for coming in.

REP. ROY BLUNT (R), MINORITY WHIP: It's good to be with you, Wolf.

BLITZER: The Democrats have the votes in the Senate, by all accounts, to override the veto. They don't yet have the votes in the House. But they're targeting a lot of Republican districts, trying to get 15 or 20 votes that they may need, and they are using this ad, together with their allies.

I want to play the ad for you and get your response.

(BEGIN VIDEO CLIP)

ANNOUNCER: George Bush just vetoed Abby (ph) and Josh. He vetoed Latoya (ph) and Kevin. Bush vetoed health insurance for millions of America's children whose parents work but can't afford coverage. George Bush and his backers would rather send half a trillion to Iraq than spend a fraction of that here to keep our kids healthy.

Congress can override Bush's veto. So ask your representative, do they stand with him or with them?

(END VIDEO CLIP)

BLITZER: All right. That's a pretty powerful ad. What do you say?

BLUNT: I think it might be more powerful a year from now. I really think our members feel like that they have plenty of time to explain their legitimate concerns with this bill.

This is more than just a good title. It's a good title on a flawed bill. And our members are able to make that case when they are out there. And we are going to hear that same kind of ad, I think, all fall as we look at the vetoes that are coming up on spending.

The war on terror, the war against Islamic totalitarianism, can't be the excuse to not have any spending discipline for all of the entitlement programs we could think of or all the spending we could think of here in Washington.

BLITZER: But...

BLUNT: So what we're really doing, I think, Wolf, is we're opening the door to a series of vetoes, a series of House Republicans and standing strong against excessive spending.

BLITZER: But you know, Congressman, the president can't run for re-election, but he can certainly do a lot of damage to your fellow Republicans in the House of Representatives by trying to force them to vote for a bill that's pretty popular and has the overwhelming support clearly of the Democrats, but even a lot of Republicans. Ray LaHood, Republican of Illinois, someone you know in the House, "This legislation is the product of a bipartisan group that worked to produce a compromise that should be acceptable to all of us."

How uncomfortable as the minority whip are you of putting your Republican colleagues in such a situation?

BLUNT: Well, I think it's getting us -- getting our credibility back, on -- standing up for bad policies. Just because something sounds good doesn't mean it is good. And our members are making that case at home.

You know, my friend Ray LaHood was not in that bipartisan discussion, because no House Republican even saw this bill until less than 24 hours before we voted on a 299-page bill that has a huge funding gap in it, a huge gimmick in it, and a bill that doesn't take the step we need to take, which is focus on insuring kids first who really don't have access to health care.

It's a very standard thing for government to do. When you get down to the hard work of finding the last kids whose parents make less than $42,000 and aren't poor enough to be on Medicaid, you just walk away from that and say, well, let's just insure more kids rather than find the kids that need to be insured.

BLITZER: Here's the next argument the Democrats are going to make. Based on my reporting, not only at a time when you are asking for $200 billion more to fight the wars in Iraq and Afghanistan, why should these poor kids -- even if some of them may be middle class kids -- why shouldn't they have the same kind of health insurance that you, members of Congress, have?

BLUNT: Well, members of Congress pay a substantial part of their health insurance, and they pay all of it if they add their families. But the real question is, when you go out and talk to people about insuring kids, having taxpayer-paid insurance for kids whose families make up to $83,000 a year -- it was an unlimited amount in the original House bill, but it's $83,000 a year -- in most of America, that seems like a family that ought to be making their...

(CROSSTALK)

BLITZER: But that's only in New York State. Isn't that right?

BLUNT: Well, it's in New York State or any other state that would want to go to that level. In every state it would be over $60,000.

BLITZER: What about in Missouri, your state?

BLUNT: In Missouri, it's $60,000 a year now. This, because we had exemptions issued over the years. And Missouri doesn't happen to be one of the states that actually insures more adults under this program than kids. There are a handful of states that insure more adults than kids under this program that's for kids. House Republicans want to insure kids first and they want to insure kids first who really don't have access to health care before we try to expand this program in an unreasonable way. The funding source in this program goes away in years six, seven, eight, nine, and 10, Wolf. It's not a well-thought out bill.

We want to have a chance to negotiate on a bill that we are for what the bill is designed to do. We just want it to do what it's designed to do, not what the bill actually does.

BLITZER: Congressman Blunt, thanks for coming in.

BLUNT: Good to be with you.

BLITZER: And speaking of politics, CNN is giving you the chance to question former president Jimmy Carter. He'll be here in THE SITUATION ROOM tomorrow. And as part of CNN's I-Report, you can send questions you would like to ask him.

They will be your questions possibly put to Jimmy Carter right here. You can submit your video questions by logging on to CNN.com/situationroom.

Early frontrunners have been known to stumble and even self- destruct. Just ask the 2004 presidential candidate Howard Dean. Might Hillary Clinton follow in his footsteps?

Also coming up, Republican presidential candidate Mike Huckabee is the victim of a hoax. We'll tell you what happened.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Democrats are trying to show voters they are ready and willing to take on terrorists. But can they win a new showdown over warrantless wiretaps?

We'll take a closer look at the battle that's brewing right now.

And how did the latest Osama bin Laden tape get released early? Did national security suffer in the process? Terror researchers are raising some frightening red flags.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Happening now, President Bush says more than 5,000 U.S. troops will be home from Iraq by Christmas. Is it because of the so- called surge? We're watching the story.

You probably use Google all the time, but did you know it could be used to find out exactly where you live and even look right into your front yard? Some privacy experts call it a Peeping Tom.

We are watching this story as well.

And in Hollywood, it is cool to be green. For many celebrities, being environmentally conscious is super chic, but are they as green in their private lives as they are in public? You may be surprised to find out.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

A company that secretly spies on what terrorists are up to on the Internet says one of its priceless anti-terror tools is now worthless. That company is outraged and they're blaming the Bush administration. The company named SITE. It says a leak out of the Bush administration closed an open door to spy on al Qaeda.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: That's right, Wolf. And you know, there are several companies and individuals who provide intelligence and analysis to the government. The SITE Institute is just one of those. These companies play a vital role in the war on terror because the mission is sometimes overwhelming.

(BEGIN VIDEOTAPE)

ARENA (voice over): It was the first time Osama bin Laden has been seen on videotape in nearly three years. But the U.S. government wasn't the first to get the tape. It was a firm called the SITE Institute.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: There was a private company that contacted the White House to let us know that they had found an Osama bin Laden tape, asked us if we wanted to have the federal government review it.

ARENA: A small firm with exclusive access to a message from the world's most wanted terrorist? Just who are these companies? And why do they have intelligence that the government doesn't?

Ben Venzke runs another firm called IntelCenter and has contracts with several government agencies.

BEN VENZKE, INTELCENTER: Even with all the resources that the government has, there is not enough resources to apply to every kind of issue and challenge they're facing.

ARENA: Venzke won't say exactly how he finds terrorist videos, but says sometimes he can do it more quickly than the government.

Cyber sleuth Laura Mansfield doesn't have any government contracts. Still, she spends her days scouring message boards and blogs for hints that terror videos are coming.

LAURA MANSFIELD, LAURAMANSFIELD.COM: Because I'm not burdened by bureaucracy, I'm just a private individual, you know, working on my own, I'm able to do things that perhaps -- you know, for example, data mining, that's something that the U.S. government is not able to do in many cases.

ARENA: Many terrorism experts say the more eyes and ears the better, and that the focus should not be on who gets the information first, as long as it ends up with the government.

Mike Rolince is a former senior FBI counterterrorism official.

MIKE ROLINCE, BOOZ ALLEN HAMILTON: Are you getting it in a timely manner? Do you understand what's in it? And can you use what's in it?

(END VIDEOTAPE)

ARENA: While speed can sometimes be a benefit, it is the context and expert analysis that some firms offer that's more significant. And, on that front, a spokesman for the director of national intelligence tells CNN, it appreciates all the information that it can get its hands on -- Wolf.

BLITZER: Have you gotten a sense how much damage, though, was done to national security by the early release, the leak of this videotape, information?

ARENA: No, Wolf, we haven't.

I mean, SITE, of course, says that one its intelligence channels was shut down. The government says it has no reason to believe that that's not the case. But other firms out there say that they continue to use other avenues to get videos and information, that it is business as usual for them.

BLITZER: We are going to watch this story closely.

Kelli, thanks very much -- Kelli Arena reporting.

Right now, House Democrats appear to be on a fresh collision course with the White House. It involves efforts to protect you while also keeping all of us safe.

Our congressional correspondent Jessica Yellin is following this story up on Capitol Hill.

It involves the administration's wiretap authority, the powers of the administration.

What's going on, Jessica? JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, House Democrats say that the wiretap bill that they hurriedly passed in August went too far and they have to fix it. But House Republicans say the Democrats' solution is not sitting well with them.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): House Democrats say the current law gives the government far too much power.

REP. JERROLD NADLER (D), NEW YORK: To capture millions and millions and almost all phone calls originating or entering the United States without a warrant. And that's just -- that's wrong. It's a total invasion of privacy of Americans.

YELLIN: They say the bill they are introducing today would better protect Americans' privacy. The government currently does not need court approval to listen to people overseas who might be calling the U.S. The new law would change that. It would require the government get warrants for those kinds of calls.

And, to be efficient, the bill would let the court issue blanket warrants, allowing the government to eavesdrop on people it can show might be affiliated with a targeted group like al Qaeda. House Republicans are bashing the bill, saying it could give constitutional protections to terrorists.

REP. DARRELL ISSA (R), CALIFORNIA: This bill, this cleaning-up bill, if you will, gives Osama bin Laden Fourth Amendment rights. That's what I read in the bill. It leaves it unclear as to whether Osama bin Laden or one of his lieutenants calling into America can be listened to without a warrant.

(END VIDEOTAPE)

YELLIN: And there is another sticking point for Republicans. The House Democrats' bill does not include immunity for those telecommunications companies that cooperated with the Bush administration and allowed them to use their services for surveillance in the past.

House Republicans and the White House both say that immunity must be part of any future bill -- Wolf.

BLITZER: As you know, the Republicans are suggesting the Democrats are simply weak on national security. So, how risky is this for the Democrats right now?

YELLIN: It is a risk, but Democrats feel it is a fight they have to have. That's because civil liberties groups were so outraged over the bill that Congress passed just before recess. So, Democrats feel they have to take on this fight even if it means a national security showdown with the White House.

BLITZER: Jessica Yellin on the Hill for us -- thanks, Jessica. Presidential politics are getting dirty in Iowa. A hoax e-mail claiming to be from Governor Mike Huckabee's Iowa state chairman is announcing his move to another Republican campaign.

Now the Huckabee campaign is going online to clear things up.

Let's get the specifics from our Internet reporter, Abbi Tatton.

First of all, what does this e-mail say, Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it basically says, I like Mike Huckabee, but I'm off to join Mitt Romney.

And it is claims to have been sent by this guy. This is the Iowa chairman for Mike Huckabee, Bob Vander Plaats, seen here in this video. And the e-mail cites fund-raising concerns as the reason that he is defecting to the Mitt Romney campaign.

The thing is, it is a hoax. There is no defection. Bob Vander Plaats isn't going anywhere. And he posts the e-mail on Mike Huckabee's Web site, saying, "Imagine my surprise when this showed up in my inbox." He says he's happy with the Mike Huckabee campaign.

So, who is behind this e-mail that is circulating amongst Iowa activists. Well, the Huckabee campaign says they are looking into it. They say they are not -- they don't suspect anyone from the Mitt Romney campaign.

A spokesman for Mitt Romney says the e-mail was desperate and they say they have nothing to do with it. And that spokesman warned people about these suspicious-looking campaign communications. On that note, this particular e-mail that looked official and from a campaign was actually sent from a Gmail account. That should be your first clue -- Wolf.

BLITZER: Thank you very much, Abbi, for that.

Abbi Tatton, Kelli Arena, Jessica Yellin, as you know, they are all part of the Emmy Award-winning best political team on television. And, remember, for the latest political news at any time, you can check out our Political Ticker at CNN.com/ticker.

Don't count him out. That's what John Edwards is saying. Even though he is in third place in some of the polls, the presidential candidate is using two words to remind you of one past front-runner's fall from grace: Howard Dean.

And Mothers Against Drunk Driving are mad. They are outraged over attempts to lower the minimum legal drinking age. Is 18 too young to be allowed to start drinking alcohol?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We will get to our "Strategy Session" in a few moments, but first this.

It has been two decades since the legal drinking age in the United States was raised to 21 for all alcoholic beverages. But now some young people would like to change that. And they have a fight on their hands.

Let's bring back Carol Costello. She's here in THE SITUATION ROOM.

And it is a very emotional, it's a strong debate that's unfolding about lowering the drinking age.

CAROL COSTELLO, CNN CORRESPONDENT: And, boy, do older people and younger people feel differently about this issue.

Columbia University says one out of five drinks sold in this country is consumed by an underage drinker, one in five. And many of them get behind the wheel. It is a huge problem. And some say you have got to deal with reality; that legal and 21 law ain't working.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): It's a preemptive strike. Mothers Against Drunk Driving, MADD, has joined forces with the federal government and the American Medical Association to keep the legal drinking age in this country at 21.

GLYNN BIRCH, PRESIDENT, MOTHERS AGAINST DRUNK DRIVING: The 21 law saves lives and protects young minds.

COSTELLO: MADD is concerned with a not-so-quiet move to lower the drinking age to 18, led by blog sites like Choose Responsibility and YouthRights.org.

ALEX KOROKNAY-PALICZ, YOUTHRIGHTS.ORG: So, if on the one hand we are saying 18-year-olds are mature and responsible enough to handle every aspect of adulthood, then absolutely they are able to, you know, have a can of beer or glass of wine. It is absurd to have that double standard.

COSTELLO: And there are small signs their efforts have paid off.

At least a dozen colleges are adapting social norm marketing, which steers students away from binge drinking not by telling them it is illegal, but by pushing them to moderate, responsible drinking.

In Kent, Ohio, where Kent State University is located, there is a push in city council to lower the drinking age from 21 to 18. MADD and its new coalition calls that dangerous, telling us one-third of traffic accidents involving teenagers are alcohol-related.

JAN WITHERS, EXECUTIVE DIRECTOR, MOTHERS AGAINST DRUNK DRIVING: I personally know what the effects of underage drinking feel like when Alisa was declared dead.

COSTELLO: Withers' 15-year-old daughter was a passenger in a car with a drunk 17-year-old behind the wheel. Supporters of a lower drinking age don't dispute the numbers, but say the taboos associated with booze only add to the problem.

KOROKNAY-PALICZ: If we were to really reform the way that we approach alcohol in this country that it would make it safer and we wouldn't see all the problems that we see on the roads and in our homes.

COSTELLO: It is an idea that has traction, but if MADD's coalition effort pays off, not for long.

(END VIDEOTAPE)

COSTELLO: Now, I talked with several universities today who told me we should openly discuss lowering the drinking age, because then they could teach 18-year-olds to drink responsibly.

In fact, Wolf, the University of Virginia, I spoke to an alcohol counselor there, and she said that students who are underage look at the 21-year-old drinking law like the speed limit. They look at it as a suggestion, not as a law. They drink anyway. She says that the students who are more likely to drink aren't going to pay attention to the law anyway.

BLITZER: And they also say that, if it is OK for them to go fight and die in a war in Iraq, it should be OK for them to...

COSTELLO: Yes. You can adopt a kid. You can vote. You can go fight a war, but you can't have a beer.

BLITZER: This is going to be a huge debate we will continue to monitor. Thanks very much, Carol, for that.

Crashes in cars and other vehicles are the leading cause of death for 15- to 20-year-olds in the United States. The National Highway Transportation Safety Administration reports that 28 percent of young drivers killed in 2005 had been drinking. Of those, 23 percent had a blood-alcohol level of 0.08, the limit for driving legally or higher.

Obama, Edwards, Richardson, Biden, they're dropping out of the Michigan race. You are going to find why it all may be a move to hurt Hillary Clinton. We will tell you what's going on.

Plus, supporters of same-sex marriage are hitting the airwaves, in hopes of changing minds and changing the law. We will tell you what is going on -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Some Democratic presidential candidates are thumbing their noses at one very important presidential state. They are backing out of Michigan's primary.

Obama, Biden, Richardson, Edwards, they are saying, we don't want our names on the Michigan primary.

Help me understand what is going on, because a lot of people in Michigan, a lot of people in Florida, a lot of people around the country are angry at the DNC for doing this.

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, first of all, the DNC had nothing do with these candidates taking a voluntary pledge not to campaign in any of the states that are not in compliance with the rules.

These candidates signed an agreement with the four early states, Iowa, New Hampshire, South Carolina, Nevada, not to campaign, not to spend money. And, so, the four candidates you mentioned signed an affidavit today to have their name removed from the Michigan ballot. Senator Clinton decided -- and I believe wrongly -- to allow her name to stay on the ballot, along with Senator Dodd.

BLITZER: Even though she says she is not going to campaign there.

BRAZILE: She won't campaign. She won't spend money.

BLITZER: But doesn't this risk alienating a lot of Democrats in Michigan?

BRAZILE: Well, this is about the rules that both Michigan party, as well as the Florida party and other parties, including on the Republicans' party -- Republican Party side, decided that the window would start on February 5.

So, if they want to violate the rules in what I call electoral blackmail, go ahead. But we're going to enforce the rules. But it has nothing to do with the DNC. They signed an agreement with Iowa, New Hampshire, Nevada, and South Carolina.

BLITZER: Because there are a lot of Republicans, Cheri, who are upset that these two states, Iowa and New Hampshire, have such an inordinate amount of influence in shaping who is going to be the next president of the United States, and they would like to see some other states step up and have a bigger role.

CHERI JACOBUS, REPUBLICAN STRATEGIST: Sure. I mean, a lot of people want other states to go first. Everybody wants to go first, really, if they could. It helps them raise money. It puts them in the spotlight. And it's a great deal of fun.

But the Republicans are not really punishing the different states, or certainly not the candidates, if they want to campaign. Look, Michigan is a very important state. And I think the thinking behind the Clinton campaign at this point is, they want to be able to do well in Michigan. Quite frankly, I don't think they are looking at the primary right now. They looking at the general. And the Clinton campaign is thinking, OK, who are we going to be running against in the general campaign, and what is it going to look like for them in Michigan?

BLITZER: Because the...

(CROSSTALK)

JACOBUS: You got Romney, whose father was a Michigan governor.

Hillary Clinton does not want to just completely walk away from Michigan. It is not about her primary. It's about the general election.

BLITZER: And Florida as well, you have Senator Nelson in Florida, Democrat, he wants to file a lawsuit against the DNC because they are trying to prevent Florida from playing a significant role in this presidential primary process.

(CROSSTALK)

BRAZILE: Florida, like Michigan, can go ahead and conduct this beauty contest, because no delegates will be elected on that date.

The Republicans are also enforcing their rules. Their rules are not as stringent as our rules. But this is not about just the rules. The candidates voluntarily signed an agreement. So, Hillary Clinton now has a problem with explaining this to the voters in Iowa, New Hampshire, Nevada, and South Carolina why she has agreed to leave her name on the ballot.

BLITZER: Is it time to rethink the whole process and move away from what has been the tradition, Iowa, New Hampshire, South Carolina, and try to find some other way for the two parties to select their nominee?

JACOBUS: You know, it is possible that it is time, but not at this time. I don't think you should do it when it is this heated and you are in the primary season. I think it has to be done sort of offline.

But I'm a firm believer myself -- and I don't know if this is a Republican or Democratic view or just a generic view -- but every campaign, every candidate should be able to make those decisions on their own, where they want to campaign, where they want to spend their money, which debates they want to take part. It has to be part of their own strategy.

But, clearly, this is part of the Clinton strategy. And I'm with Donna. I think that she does owe an explanation. And it's hers to give. And people can accept it whether they want to or not.

BRAZILE: It is bigger than the candidates. It's two parties sitting down. And we will sit down before 2012 to hash out a good process. BLITZER: We hear this all the time, though.

BRAZILE: No. But we -- I have actually sat down with my counterpart in the Republican Party. Jim Roosevelt, the co-chair of the DNC Rules Committee, we have talked to David Norcross. So, we are going to sit down. We are going to hold our nose and we're going to make it work next time.

BLITZER: John Edwards is stepping up the rhetoric. This is what he said.

I'm going the read it to you. He said: "I lived through the inevitability of Howard Dean. I know that what happens from my experience in 2004 is people look much more intensely at you as a candidate. The closer you get to the caucus, a lot of the celebrity fades away."

It looks like a slap at Hillary Clinton. Could she turn out, given what he is suggesting now, to be another Howard Dean?

BRAZILE: Hillary Clinton is no Howard Dean.

And, first of all, let me give a great deal of respect for the Dean campaign in 2003 and 2004. It really gave the Democratic Party its voice back. But Hillary Clinton is running a very good, strong campaign. And John Edwards may be having a little deja vu. Or this may be a sign of desperation. But she has a credible campaign with resources on the ground, and a message to boot.

BLITZER: Is her campaign on the Democratic side, Hillary Clinton's, unstoppable?

JACOBUS: I think that it is pretty well accepted that it is inevitable. And she is clearly looking to the general election. And most of the other candidates are looking to be her vice presidential running mate. So...

BLITZER: Is that what you think?

BRAZILE: We have not selected one delegate (INAUDIBLE) delegate.

There are a lot of undecided voters out there, and there are a lot of voters that might change their mind over the next couple of weeks.

BLITZER: How scared are Republicans of Hillary Clinton if in fact she becomes the Democratic nominee?

JACOBUS: I don't think that Republicans are scared of her. I think that we look forward to the challenge.

Look, we have known for a long time what her ambitions were. We have known for a long time that she would be the likely nominee whenever she ran. So, you know, we have been, I think, prepared for this for quite some time. It is not a surprise. And I think it's something that people have expected really, quite frankly, for a number of years.

BLITZER: Do you get any sense -- and you watch this about as closely as anyone, Donna -- that she is getting sort of overconfident and forgetting about Iowa, New Hampshire, the primaries, already looking ahead to the general campaign against the Republican presidential nominee?

BRAZILE: You know, I get e-mails from all of the campaigns, all of the candidates.

And the one thing I can tell you over the last couple of days, the Hillary Clinton campaign, if anything, they are redoubling their efforts. They are out there. They're campaigning. They're raising money. They are doing what it takes to win.

But I must also tell you, Obama, he's very strong. So, I shouldn't -- you shouldn't blow him off, because I think he is going to be a very formidable candidate once the voters get into the ballot box.

BLITZER: Do you think -- you agree about Barack Obama being a formidable potential candidate?

(CROSSTALK)

JACOBUS: I -- you know, I think that his time is probably a few years from now. My guess -- and this is just mine -- that I don't even think he would want to be on the -- number two on the ticket, because he's young and he wouldn't want to take the Clinton baggage.

So, I think, with the exception of Obama, the rest of them are probably running for vice president. But I think it is practically a coronation on the side of the Democrats.

BRAZILE: No, it is not about his age.

(CROSSTALK)

BRAZILE: It is about the country wanting change. And they are voting with their pocketbooks right now. And that's why he has raised $75 million, and Republicans are still scratching around for change.

BLITZER: Guys, we have got to leave it right there. Thanks very much to both of you for coming in, Donna Brazile and Cheri Jacobus.

Richard Nixon once said what he thought of Fred Thompson. And guess what? It was not very kind, as President Nixon called Thompson -- and I'm quoting him now -- "dumb." You are going to want to hear what else he had to say -- that would be Richard Nixon -- about the man who now wants to be president.

And a tool by Google could be used to find out where you live, even peer right into your front yard. Some privacy experts are calling it a Peeping Tom. Should you be worried?

Stay with us. You're in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: Checking our "Political Ticker" this Tuesday: some more blunt talk about Republican presidential candidates, this time coming from the former Bush White House counselor Dan Bartlett.

During a recent appearance before the U.S. Chamber of Commerce, Bartlett reportedly called Fred Thompson the 2008 campaign's -- quote -- "biggest dud." He did not have much nice to say about Mitt Romney either, suggesting he is a flip-flopper who has a real problem in the South.

And Bartlett is quoted as saying former Arkansas Governor Mike Huckabee's last name is simply -- quote -- "too hick."

Actor/director Rob Reiner is helping Hillary Clinton appeal for campaign volunteers. A new tongue-in-cheek Web video shows Reiner giving unsolicited and pretty funny advice to Clinton campaign workers who don't get their pitch just right. He deadpans that one would-be Clinton voter would rather be making a casserole than talk to you. Reiner is backing Clinton's presidential bid, as you probably know.

Meantime, the former Mexican President Vicente Fox apparently is a Hillary Clinton fan, even if he didn't quite come out and say it. On CNN's "LARRY KING LIVE" last night, Fox was asked who he hopes will be the next occupant of the White House.

Listen to this.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

VICENTE FOX, FORMER MEXICAN PRESIDENT: Difficult to say, because, when listen to candidates, everywhere, they talk too much. They concrete things very little, and -- but a lady would be my choice.

(END VIDEO CLIP)

BLITZER: And, remember, for the latest political news at any time, you check our Political Ticker. Simply go to CNN.com/ticker.

Let's go to Jack Cafferty. He's in New York with "The Cafferty File" -- Jack.

CAFFERTY: The question -- the question is, how can the U.S. win the war on terror if the Bush administration is ruining efforts to spy on al Qaeda? A very interesting story in today's "Washington Post."

Craig writes from Ohio: "I smell a rat. How could the Bush administration justify global conquest if it actually puts these clowns out of business? In six short years, a small band of Muslim radicals has morphed into the Power Rangers and become the supposed focal point of the war on terror claptrap. I don't think they want to find these idiots."

Tom writes from New York: "The administration isn't chiefly interested in getting rid of al Qaeda. They are more heavily invested in using the idea of al Qaeda and potential attacks as leverage to create policy in line with their own views. Al Qaeda terror just serves us too good a crowbar to push through legislation and political support. The video being released early, despite its severely hampering effect on al Qaeda intelligence operations, just serves to prove what the White House's priorities are."

David in Ohio writes: "The Bush administration is not at fault for hindering U.S. attempts at spying. The ones at fault are the media. How can intelligence do anything when you have news services telling the public what the government and military have found out? I have seen the media come up with special what-if presentations regarding possible terror scenarios in which they actually offer up ideas on terror techniques that haven't been used yet. We would all be a lot safer if the media would just let intelligence and the military do what they need to do, without reporting on everything they find out."

Glenn in Rhode Island: "The folks in Washington are like a fire department, shows up at a three-alarmer, expresses outrage, offers sympathy, speaks words of encouragement, asks for a contribution, sticks you with the bill, and then leaves to offer the same services to a fellow American down the street whose cat needs rescuing."

And Dave in Webster, New York: "Jack, what are you talking about? Spy, shmy. Haven't you heard? Mission accomplished" -- Wolf.

BLITZER: Thank you, Jack -- Jack Cafferty and "The Cafferty File."

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: a private spy firm which discovered the latest Osama bin Laden tape blaming the government now for tipping off al Qaeda by leaking that video. Did the feds fail the American public by going public?

A new shooting involving private convoy guards in Baghdad. Two women are dead. Who is getting the blame this time?

And is the movie business going green, or is all the talk about the environment just Hollywood hypocrisy?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

But, up first, that developing story involving yet another deadly shooting by private security contractors in Baghdad. Blackwater USA, tied to a bloody incident which left 17 civilians dead last month, says it was not involved this time.

CNN's Alessio Vinci is in Baghdad. He's joining us now live. Who is getting the blame, Alessio, this time? Tell our viewers what happened.

ALESSIO VINCI, CNN ROME BUREAU CHIEF: Hello, Wolf.

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